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Friday, 10 July 2015

CAFC Judges Debate Correct Claim Construction Standard For AIA Trials

On June 8, 2015, the U.S. Court of Appeals for the Federal
Circuit again considered one of the earliest final decisions from the USPTO’s
Patent Trial and Appeal Board in an inter partes review proceeding under the Leahy-Smith America
Invents Act of 2011. In a set of revised opinions from the panel
hearing the appeal, and three additional opinions debating the court’s denial
of the patent owner’s petition for rehearing en banc, the court exposed strongly-held – and nearly equally
divided – views on the proper claim construction standard applicable to AIA
trial proceedings. In re Cuozzo Speed
Technologies, LLC, No. 2014-1301 (Fed. Cir. Jun. 8, 2015)(revised panel
decision and order denying motion for rehearing en banc). Revised merits opinions are HERE. Order denying rehearing
is HERE.

The revised decision did not affect the earlier holdings in the case. See In re Cuozzo Speed Technologies, LLC,
778 F.3d 1271 (Fed. Cir. 2015). Specifically:

·The PTAB’s final decision holding that three
claims are invalid as obvious, despite applying references not identified in
the challenger’s petition, was not erroneous.

·The PTAB did not err in denying the patent
owner’s motion to amend claims because the proposed claims would have
impermissibly broadened the claimed invention.

However, the court as a whole disagreed sharply on whether
the panel was correct in applying the “broadest reasonable interpretation”
standard when construing claims during the trial.

Background

Cuozzo Speed Technologies, LLC owns U.S. Patent No.
6,778,074, titled “Speed limit indicator and method for displaying speed and
the relevant speed limit.” The patent claims, among other things, a speed
display connected to a global positioning system device that displays a vehicle’s
current speed and indicates when the speed exceeds the legal speed limit for the
vehicle’s exact location. Garmin International, Inc. filed a petition for inter partes review of certain claims of
the ‘074 patent on September 16, 2012 – the first day that IPR proceedings were
available under the AIA. Garmin contended that specific combinations of prior
art references created a reasonable likelihood that the challenged claims were
invalid. See 35 U.S.C. § 312(a). The PTAB
instituted review on claims 10, 14 and 17 of the ‘074 patent, although the PTAB
based its decision on claim 10 and 14 by applying references that Garmin did
not identify as relevant to those claims. In the ensuing trial, the PTAB
construed the claims by giving them the “broadest reasonable construction in light
of the specification of the patent in which it appears.” 37 C.F.R. § 42.100(b).
It also denied Cuozzo’s request to substitute amended claims for the challenged
claims. Ultimately the PTAB ruled that all three claims were invalid as
obvious.

Cuozzo appealed the result to the Federal Circuit. In a
February 4, 2015 divided decision, the court ruled that the USPTO’s decision to
institute an IPR proceeding was not appealable, either prior to or after the
PTAB’s final decision. See 35 U.S.C.
§ 314(d) (“[t]he determination by the Director whether to institute an inter partes review under this section
shall be final and nonappealable.”). The majority also held that the “broadest
reasonable interpretation” standard was appropriate. The court held that the PTAB
properly denied Cuozzo’s request to amend the ‘074 patent claims because the
proposed claims were broader than the original claims in some respects, even
though they were narrower in other respects. See 35 U.S.C. § 316(d)(3). Finally, the court affirmed the PTAB’s
final determination that the three claims were obvious. Cuozzo filed a petition
for rehearing en banc.

Federal Circuit
Denies En Banc Review

The Federal Circuit declined the request for en banc review by a razor-thin margin. Five
judges joined an opinion written by Chief Judge Sharon Prost, dissenting from
the denial. Four other judges joined an opinion by Circuit Judge Timothy B.
Dyk, concurring in the denial. Judge Newman also wrote a separate dissenting
opinion.

The principal point of disagreement on the court was the
standard the PTAB should use to construe claims during AIA proceedings. The
USPTO implemented the AIA’s post-grant provisions by promulgating rules
requiring that claims be interpreted using the “broadest reasonable
interpretation” standard. In federal court proceedings, on the other hand,
claims are construed to have their “actual” meaning to a person skilled in the
art based on the claim language, specification, prosecution history, and – occasionally
– other extrinsic evidence. The USPTO’s broader construction may make it easier
for the Board to invalidate a claim as obvious or lacking novelty. This is a
conservative approach when a claim is undergoing examination, but becomes an
issue when applied to issued claims not undergoing further examination.

In a short opinion concurring in the denial of rehearing,
Circuit Judge Dyk argued that the “broadest reasonable interpretation standard”
was supported by the AIA’s legislative history. The USPTO’s use of that
standard for decades was well known to Congress, and the legislative history is
silent about requiring a different standard. In addition, Judge Dyk argued, Congress
extended broad regulatory authority to the USPTO to adopt rules governing PTAB
trials, so it must have understood that the Office was likely to adopt the
standard it had consistently used. Judge Dyk also noted that court action was
inappropriate when Congress currently is considering legislation that would
change the applicable standard:

In the absence of evidence of
congressional intent to abrogate the broadest reasonable interpretation
standard, we should not act to adopt a different standard based on our own
notions of appropriate public policy. If the standard is to be changed, that is
a matter for Congress. There are pending bills which would do just that.

In her dissent, Chief Judge Prost argued that the AIA
post-grant trial mechanism was a “new, court-like proceeding[,]” and thus the
construction standard that applies in traditional litigation matters should
apply. The dissent dismissed Judge Dyk’s review of the AIA legislative history,
noting that the history is silent about the proper claim construction standard
and, as the Supreme Court has noted, Congress’ silence on an issue is not
helpful in resolving an issue of statutory intent. Instead, she argued:

Congress’s intent in creating a
completely new type of PTO proceeding—one bearing the efficiency and finality
of district court adjudications of patent validity— could not have been
clearer. The panel majority fails to explain why Congress (or anyone else)
would have thought it desirable or necessary for the Board to construe the
claims during IPRs under a different legal framework than the one used by district
courts.

Prost Dissent at 3. Chief Judge Prost also argued that the
Federal Circuit has only embraced the “broadest reasonable interpretation”
standard as a useful tool prior to patent issuance or during reexaminations or
reissues. In those settings, the standard reduces the possibility that a claim later
will be construed more broadly than was assumed during examination. In
contrast, the standard should not apply when the patentee lacks a liberal
ability to amend pending claims. She noted that under the PTAB rules,
amendments are possible, but limited. Because the AIA IPR trials are much like
the district court proceedings they were intended to replace, with “no
back-and-forth between the patentee and examiner seeking to resolve claim scope
ambiguity [and] there is no robust right to amend[,]” the dissent argued that the
“broadest reasonable interpretation” standard should not apply.

To find otherwise would ignore the
difference between the broadest reasonable interpretation and what a patent
actually claims. In obtaining a patent, a patentee discloses his invention to
the public in exchange for a limited monopoly, as defined by the claims of the
patent. To invalidate those claims using a different standard than one that
considers the true meaning and scope of a claim would violate the bargain the
patentee struck with the public.

Prost Dissent at 4-5.

Judge Newman filed a separate dissent, pointing out that all
amicus briefs submitted in the case argued against different standards in PTAB and
district court proceedings, stressing the concern that different claim
constructions would lead to uncertainty a lack of predictability in patent
rights.

In light of the divergent views expressed in the concurring
and dissenting opinions, it is likely that Cuozzo will petition the U.S.
Supreme Court to take the case in the 2015 term. In addition, the judicial
debate may affect Congress’ consideration of pending proposals to resolve the
issue in patent reform legislation. In the interim, the “broadest reasonable
interpretation” standard will continue to apply in all AIA proceedings.

1 comment:

MaxDrei
said...

Some thoughts:1. When you see BOTH the accused infringement AND the prior art, you know for the first time whether it is just, that the accused infringer should be enjoined. The judges at the USPTO see no accused embodiment, so best that they go for BRI, leaving the courts enough wiggle room to narrow the duly issued and presumed valid claim enough to let the accused infringer get away in cases where it is just that he should do so.2. Duly issued claims are presumed valid in court. Only evidence that is "clear and convincing" can touch their validity. This is the counterpart to a claim construction exercise by the court that says the claim is narrower than its BRI scope. 3. Ever since the year 1906, says the majority, the USPTO has used BRI to "prevent needless litigation after the patent has issued". Curtailing the amount of patent litigation seems to be a top current preoccupation in the USA. Hence, I suspect, the determination to cling to BRI, despite Pauline Newman's good reasons to eschew it.4. Some commentators are saying that in reality there ain't much difference betweeen BRI and the court's Philips standard of claim construction. Much ado about not much? No sky falling after all?